Obama takes action against colleges preying on military, veterans

President Obama will sign an executive order Friday aimed at rooting out fraud and abuse of federal programs aimed at helping members of the military, veterans and their families go to college.

Obama will travel to Fort Stewart in Hinesville, Ga., to take steps to “ensure that service members and veterans and their families have the critical information they need to make informed decisions that protect them from aggressive and deceptive targeting by education institutions,” a senior administration official said Thursday on a conference call with reporters. He'll be joined by first lady Michelle Obama, who has made military families a priority with her Joining Forces initiative.

It’s been well-documented that some institutions – particularly for-profit colleges – target military and veteran students in their recruitment efforts without taking into account the readiness of those students for college-level classes, all in the interest of drawing in federal financial aid dollars and not necessarily in the interest of students.

The Education Department has already taken dramatic action aimed to rein in abuses of the for-profit colleges, with regulations on gainful employment and incentive compensation that have begun to take effect, but those rules are not enough when it comes to oversight of benefits for current members of the military, their spouses and veterans receiving support through the Post-9/11 GI Bill.

Provisions in the order include:

-Requiring that colleges make provide the Consumer Financial Protection Bureau’s Know Before You Owe financial aid form to all students participating in the Department of Defense’s tuition assistance program, which includes 2,000 institutions. The order also directs roughly 6,000 colleges participating in the VA’s programs to send the form to students.

-Keeping aggressive recruiters off military installations by requiring the Defense Department to establish rules for how educational institutions gain access to military facilities so that institutions with a history of bad practices are kept out.

-Cracking down on improper online recruiting, in part by having the VA begin the process of trademarking the term “GI Bill” so it can’t be used by misleading recruitment websites.

-Creating a centralized complaint system for service members and veterans to approach with their grievances against institutions.

-Collecting data from colleges on how much of their revenue comes from military and VA programs.

-Boosting enforcement of existing rules meant to protect students, including the Education Department’s regulations on gainful employment and incentive compensation.

During the 2010-11academic year, the Department of Veterans Affairs paid out more than $4.4 billion in grants to veterans under the Post-9/11 GI Bill and provided hundreds of millions of dollars in loans.

The Defense Department gave active duty service members $280 million to be used for tuition assistance in fiscal 2011, plus about $25 million for military spouses.

Eight of the top 10 institutions receiving Post-9/11 GI Bill benefits between 2009 and 2011 were for-profit colleges, and six had withdrawal rates above 50 percent, meaning that much of the federal money flowing into their coffers never led students to a degree. And service members and military spouses are also disproportionately enrolled at for-profit institutions, which enroll about 10 percent of post-secondary students nationwide.

For nearly two years, Sen. Tom Harkin (D-Iowa) has led an aggressive investigation of for-profit colleges and student outcomes. In a statement, he applauded the executive order as a “decisive step toward addressing the widespread problems” that his Health, Education, Labor and Pensions Committee has identified.

The order, he added, “sends a strong message to those who over-promise, under-deliver, and over-charge our veterans in order to profit off their hard-earned GI Bill benefits.” Moving forward, he and other congressional colleagues plan to advance legislation that will build on the order.

Former Rep. Steve Gunderson (R-Wis.), the president of the Association of Private Sector Colleges and Universities, said that the major for-profit college trade group is "disappointed" that the president chose to take executive action on issues that the industry was discussing with Congress.

"Two-thirds of the active-duty military and two-thirds of their spouses and dependents have also chosen to pursue their education through our institutions because we offer focused academic delivery and flexible scheduling that meets their individual needs," Gunderson said. "Career-oriented institutions proudly serve military and veteran populations, and work with congressional leaders in a bipartisan manner to address concerns about veteran education across all sectors of higher education."